Energy efficiency has finally become an election talking point, but for all the wrong reasons

The future of Victoria’s highly popular consumer energy upgrades scheme is uncertain with the state election looming in November, but the watchdog says its enforcement measures are successfully weeding out “bad actors.” 

Victoria’s Liberal party has given no indication yet as to whether it will keep all or parts of the Victorian Energy Upgrades scheme (VEU), other than to vow to cancel the Gas Substitution Roadmap ban on replacing end-of-life appliances with gas and beef up existing rebates for commercial and industrial solar.

Last year, the Liberals voted against extending the VEU scheme by 15 years to 2045.

Ahead of that vote, shadow energy minister David Davis called it broken and “plagued by ongoing rorts, ‘cowboy’ operators and predatory practices” – language recently repeated in an article in newspaper The Age this week alleging the scheme was in “chaos.”

But Gerard Brody, the chair and commissioner of the watchdog Essential Services Commission (ESC), says they are very aware of bad behaviour among some VEU participants and how this is changing over time, which is why it ramped up compliance monitoring of the scheme 18 months ago. 

“This has been necessitated by the growth in the program and the increased complexity of the upgrades it covers,” he said in comments emailed to Renew Economy.

“This strong regulatory approach led to enforcement action against 18 businesses in 2025–26, with 10 kicked out of the program altogether. 

“In 2024–25, we took enforcement action against eight accredited businesses.”

As of Tuesday this week, there were 241 accredited businesses in the VEU program. 

In the past, dodgy behaviour was more likely to come from illegal telemarketing and door-knocking.

But the shift from lighting upgrades and weather sealing being the main focus of the VEU to heat pumps and hot water systems has led to an new breed of fraudulent activity, such as using AI to fake documents after installed upgrades. 

This year alone the watchdog has suspended a company for using AI-doctored photos, banned another in July and refused claims of $4 million of VEUs, caused one to forfeit $6.2 million of certificates, and kicked out an operator so dodgy it later went bankrupt. 

“There will always be bad actors looking for new ways to cheat the system, and some are using AI to try and subvert our safeguards,” Brody says. 

“But we have sophisticated technology too and have had success using it to identify breaches.”

The ESC won’t say what tools or how it detects wrong doing, particularly with AI, but stronger accreditation processes can now include in-person interviews. 

To date, 2.4 million households and 180,000 businesses have used the VEU scheme, which come July next year will also house the rooftop solar rebate program. 

An extended scheme now includes subsidies for ceiling insulation.

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